The number of insolvencies involving both individuals and corporations in Germany saw a noticeable decline in May. According to the Leibniz Institute for Economic Research Halle (IWH), which published the figures on Tuesday, the count stood at 1,518. This represents a 15 percent drop compared to April.
However, the total number of bankruptcies remains higher than in May of the previous year by three percent and is 57 percent above the average observed between 2016 and 2019. One potential reason for the recent decrease could be the lower number of working days in May. Consequently, the number of insolvencies per working day is currently the second-highest ever recorded in the IWH’s insolvency trend.
The transport and warehousing sector was particularly hard hit, registering the highest number of insolvencies ever recorded in the trend, possibly due to rising fuel prices which significantly escalated operational costs for the businesses. In May, more than 11,000 jobs were affected within the top ten percent of companies that entered insolvency. While this figure shows an improvement compared to April (a 43 percent reduction) and the same month last year (a 22 percent reduction), it is still 73 percent higher than the average of pre-Corona years from 2016 to 2019.
The IWH collects early indicators for insolvency, which typically provide a two to three-month lead time regarding the insolvency landscape. Based on the high values observed in the early insolvency indicators in recent months, Steffen Müller, Head of IWH Insolvency Research, anticipates that insolvency numbers will remain at a similarly elevated level in June.
